WORLD TRADE  
ORGANIZATION  WT/REG207/3 
3 January 2007 
 (07-0001) 
Committee on Regional Trade Agreements  
  
 
   
 
FACTUAL PRESENTATION 
 
Closer Economic Partnership Agreement  
between  
Thailand and New Zealand 
(Goods) 
 
Report by the Secretariat 
 
 
 
 
This report, prepared for the examina tion of the Closer Economic Partnership 
Agreement between Thailand and New Z ealand, has been drawn up by the 
WTO Secretariat on its own responsibility.  Th e report was requested by the Parties and 
prepared in consultation with them in a ccordance with the Guid elines on Procedures to 
Improve and Facilitate the Examination Process (document WT/REG/W/15/Add.1).  
 Any technical questions arising from this report may be addressed to Ms. Jo-Ann Crawford (tel: 022 739 5422). 
 
 WT/REG207/3 
Page iii 
 
 
TABLE OF CONTENTS 
Page 
 
I. TRADE ENVIRONMENT.......................................................................................................1  
II. TREATY CHARACTERISTIC ELEMENTS .......................................................................4  
A. BACKGROUND INFORMATION ...........................................................................................4  
B. NATIONAL TREATMENT AND MARKET ACCESS PROVISIONS OF THE 
AGREEMENT .....................................................................................................................5  
1. Import duties and charges and quantitative restrictions...............................5  
(a) General provisions ..................................................................................5  
(b) Overall tariff lib eralization .....................................................................5  
(c) New Zealand's libera lization schedule....................................................6  
(d) Thailand's liberalization schedule ...........................................................8  
2. Rules of origin..................................................................................................10  
3. Export duties and charges, and quantitative restrictions............................12  
C. REGULATORY PROVISIONS OF THE AGREEMENT ............................................................12  
1. Standards .........................................................................................................12  
(a) Technical barriers to trade ....................................................................12  
(b) Sanitary and phytosanitary me asures and food standards.....................13  
2. Safeguard mechanisms ...................................................................................13  
(a) Global safeguards..................................................................................13  
(b) Bilateral safeguards...............................................................................14  
(c) Special safegua rd measure....................................................................14  
3. Anti-dumping and countervailing measures.................................................15  
4. Subsidies and Countervailing Measures .......................................................15  
5. Other regulations.............................................................................................16  
(a) Customs-related procedures..................................................................16  
(b) Electronic commerce ............................................................................17  
(c) Competition policy................................................................................17  
(d) Intellectual property ..............................................................................17  
(e) Government procurement .....................................................................18  
D. SECTOR -SPECIFIC PROVISIONS OF THE AGREEMENT .....................................................18  
E. GENERAL PROVISIONS OF THE AGREEMENT ..................................................................18  
1. Exceptions and reservations...........................................................................18  
2. Accession ..........................................................................................................18  
3. Institutional framework..................................................................................19  
4. Dispute settlement ...........................................................................................19  
5. Relationship with other agreements concluded by the Parties ...................20  
ANNEX .......................................................................................................................... .......................22  
Indicators of trade liberaliz ation under the TNZCEP ...............................................................22  
 
 WT/REG207/3 
Page 1 
 
 
THAILAND-NEW ZEALAND CLOSER ECONOMIC PARTNERSHIP AGREEMENT 
(GOODS) 
 
Factual Presentation by the Secretariat  
 
 
I. TRADE ENVIRONMENT 
1. Of the Parties to the Thailand-New Zeala nd Closer Economic Partnership Agreement 
(hereafter TNZCEP or Agreement), Thailand ranked as the world's 24th top exporter and 25th top 
importer in 2004, while for the same year New Zealand was the 53rd largest exporter and 48th largest 
importer in terms of merchandise trade.  In the period 2002-2004, New Zealand's trade to GDP ratio 
was 59.4, while Thailand's ratio was 128. 
2. Trade between the Parties accounted for 2.4 pe r cent of their combined world imports in 
2004.  Developments in recent years are pictured in Charts I.1 and I.2. 
0.00.10.20.30.40.5
1997 1998 1999 2000 2001 2002 2003 20040510152025Chart I.1
New Zealand:  merchandise imports from and exports to world and Thailand, 1997-2004
Source :  UNSD, Comtrade databaseUS$ billion US$ billion
Imports from Thailand Exports to ThailandLeft-hand scale:
Total imports Total exports Right-hand scale:
 
 WT/REG207/3 
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  0.01.02.03.04.0
1997 1998 1999 2000 2001 2002 2003 2004020406080100120Chart I.2
Thailand:  merchandise imports from and exports to world and New Zealand, 1997-2004
Source :  UNSD, Comtrade databaseUS$ billion US$ billion
Imports from New 
ZealandExports to New ZealandLeft-hand scale:
Total imports Total exports Right-hand scale:
 
 
 
3. The commodity structure of trade among the Parti es, as well as of their imports and exports to 
the world in 2003, is shown in Chart I.3, on the basis of HS section product categories. 
4. Four product categories – vehicles and aircraft , machinery, plastics and prepared foods – 
accounted for over 65 per cent of New Zealand's im ports from Thailand in 2003.  Thailand's four 
largest export product categories – machinery, pl astics, prepared foods and textiles – made up 
61.6 per cent of Thailand's total exports in 2003 and accounted for 43.5 per cent of New Zealand's 
imports from Thailand in 2003. 
5. Four product categories – animal products, pr epared foods, wood, and wood pulp – accounted 
for more than three quarters of Thailand's imports  from New Zealand in 2003.   New Zealand's four 
largest export product categories – animal products, machinery, weed, and base metals – made up 
58.1 per cent of New Zealand's total exports in 2003 and accounted for 58.2 per cent of Thailand's 
imports from New Zealand in 2003. 
  WT/REG207/3 
 Page 3 
 
 
Prepared foods 
9.3Base Metals
4.7Misc. 4.1Textiles 3.4Animal prod. 2.9
Wood
7.7Wood Pulp
4.3Machinery 4.0Hides and Skins 3.6
Optical 3.0
Wood 7.4Prepared Foods 
5.9Chemicals 5.7Chart I.3
Thailand and New Zealand: product composition of merchandise trade, 2003
New Zealand's imports from Thailand Thailand's imports from New Zealand
Source :  UNSD, Comtrade databaseOther 
4.7
Vehicles 25.2
Machinery  20.7
Plastics 10.1Per cent
Textiles 4.9Stone
 & cement
5.3
Mineral products
12.3Other 5.7
Base metals  11.1Chemicals 10.0Prepared Foods
20.2Animal Products
46.5
Plastics 4.9Machinery 22.3
Vehicles 
19.3
Base Metals 
5.3Plastics 5.0Textiles 5.0Other
10.5
Machinery
38.2
Chemicals
8.8Other
10.3
Vehicles
5.6Textiles 3.2Optical 2.4
Machinery  
   8.1Vehicles 3.1
Vehicles 6.5Not classified 3.6
Base metals
6.0Animal Products
36.6 Animal Products
 2.6
Plastics
9.8Textiles 6.9
Prepared foods
7.5Other
21.5
Vegetables 5.6Machinery  37.4Total:  US$0.3 billion Total:  US$0.2 billion
Total:  US$18.6 billion Total: US$75.8 billion
Total:  US$16.6 billion Total:  US$80.3 billionPrepared Foods
5.3
Mineral Products
10.0Textiles 2.9
Wood Pulp 4.1
Other
13.1
Vegetables 3.6Chemicals
4.4
Pearls 2.9   
New Zealand's global exports Thailand's global exportsNew Zealand's global imports Thailand's global imports
Base Metals 3.6
 
 WT/REG207/3 
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  II. TREATY CHARACTERISTIC ELEMENTS 
A. B
ACKGROUND INFORMATION  
6. The TNZCEP was signed by the Government of Thailand and the Government of 
New Zealand on 19 April 2005 and entered into for ce on 1 July 2005.  The Agreement is of an 
indefinite duration. 
7. The goods and services aspects of the TNZCEP were notified to the WTO by the Parties to 
the Agreement on 2 December 2005.  In the goods area, the Agreement was notified under 
Article XXIV:7(a) of the GATT 1994 and the Understa nding on the Interpretation of Article XXIV of 
GATT 1994 as an agreement establishing a free-trade area (WT/REG207/N/1).1  T h e  t e r m s  o f  
reference for the examination of the Agreement were adopted by the Council for Trade in Goods on 
10 March 2006 (WT/REG207/2).2  The text of the Agreement was circulated to Members as 
document WT/REG207/1, and is also available, togeth er with its Annexes, on the Parties' official 
websites (URL addresses: www.mfat.govt.nz./tradeagreem ents/thainzcep/cepindex.html  and 
www.thaifta.com/english/left_eng.html ). 
8. The Agreement is composed of 18 Chapte rs, four annexes and three side letters. 
 
Box II. 1:  Preamble  
Chapter 1:  Objectives and General Definitions  
Chapter 2:  Trade in Goods  
Chapter 3:  Customs Procedures and Cooperation  
Chapter 4:  Rules of Origin  Chapter 5:  Trade Remedies  
Chapter 6:  Sanitary and Phytosanitary Measures  
Chapter 7:  Technical Barriers to Trade  Chapter 8:  Trade in Services  
Chapter 9:  Investment  
Chapter 10:  Electronic Commerce  
Chapter 11:  Competition Policy 
Chapter 12:  Intellectual Property  Chapter 13:  Government Procurement  
Chapter 14:  Transparent Administration of Laws and Regulations  
Chapter 15: General Exceptions  Chapter 16: Institutional Provisions  
Chapter 17: Consultations and Dispute Settlement  
Chapter 18: Final Provisions Annexes 
   Annex 1 - Tariff Schedule (Thailand and New Zealand, and tariff-rate quotas)  
   Annex 2 -  Product-Specific Rules of Origin    Annex 3 - Special Safeguards for Cert ain Sensitive Agricultural Products (Thailand) 
   Annex 4 - Schedules on Investments (Thailand and New Zealand ) 
Exchange of Letters    Product Priorities fo r SPS Market Access   
   Temporary Entry for New Zealand Business People to Thailand  
   Temporary Employment for Thai Chefs in New Zealand
  
Source: TNZCEP Agreement  
                                                      
 1 The Parties jointly notified the TN ZCEP under GATS Article V:7(a), as providing for the conclusion 
of an agreement on the liberalization of trade in services (S/C/N/361).  On 9 February 2006, the Council for 
Trade in Services referred the Ag reement for examination in the CRTA.  
2 See G/C/M/83 of 1 May 2006.  WT/REG207/3 
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9. While no overall implementation pe riod is explicitly provided for in the Agreement in relation 
to the establishment of the free-trade area, the Par ties' schedules provide for the elimination of duties 
on the basis of maximum periods of up to 20 years for Thailand and ten years for New Zealand. 
B. NATIONAL TREATMENT AND MARKET ACCESS PROVISIONS OF THE AGREEMENT  
1. Import duties and charges and quantitative restrictions 
(a) General provisions 
10. Each Party accords national treatment to the goods of the other Party in accordance with 
Article III of the GATT 1994 (Article 2.2 of the Agreement). 
11. The Parties cannot increase existing, or in troduce new customs duties on imports of an 
originating good (Article 2.3).  Tr ade liberalization takes place on the basis of a positive list approach, 
and covers Chapters 1-97 of the Harmonized System  (HS).  Article 2.3 provides for the progressive 
elimination of customs duties on originating goods tr aded between the Parties, starting from the date 
of entry into force and in accordance with vari ous stages listed in each Party’s Tariff Schedule 
(Annex 1).  The Schedules indicate, for each tariff item, the base rate as well as the reduced rates at each stage.
3  Duties on bilateral imports not freed at en try into force are to  be eliminated in 
accordance with different timetables, either through their progressive reduction or immediate zeroing 
after a period in which duties are kept constant.  Th e first tranche of tariff reductions took place on the 
Agreement's entry into force on 1 July 2005.  Sub sequent tariff reductions ta ke place on 1 January of 
each given year.  The elimination of customs duties may be accelerated unilaterally or as a result of consultations requested by either Party (Article 2. 4).  Article 2.3.4 provides that either Party may 
adopt/maintain measures to allocate in-quota imports  provided that such measures do not have import 
restrictive effects additional to those caused by th e imposition of the tariff-rate quota (TRQ) itself. 
12. As regards non-tariff measures, the Parties ar e not allowed to adopt or maintain any 
prohibition or restriction on the import of any good of the other Party, except in accordance with Article XI of the GATT (Article 2.7).  A few exce ptions to this general rule are provided for in 
Chapter 15 of the Agreement (see paragraph 60).  
(b) Overall tariff liberalization
4 
13. The elimination of tariffs applicable between the Parties is revealed in the corresponding 
TNZCEP schedules.  The scope of tariff liberalizati on can be measured in terms of the number of 
affected tariff lines and in terms of the value of a ffected imports.  The share of imports at duty-free 
rates offers an insight into the liberalization of products currently traded among the Parties, while the 
percentage of duty-free tariff lines points to the longe r-term potential trade effects of the Agreement. 
14. As from 2005 (entry into force of the Agreement), 82 per cent of New Zealand 's total tariff 
lines were free for products of Thai origin;5 in terms of 2002-2004 imports from Thailand, the 
corresponding figure amounts to 84 per cent.6  By 2010, a further nine per cent of tariff lines, or 
                                                      
3 The base rate is the general rate as of 1 June 2004 with the exception of TRQ products where the 
WTO bound rate is used  as the base rate. 
4 Unless otherwise specified, all statistics, tables and charts contained in this document have been 
prepared on the basis of data  provided by the Parties. 
5 New Zealand's tariff schedule is composed of 7,204 lines at the HS 8-digit level.  In general, duties 
are defined ad valorem ; four lines hold specific duties, for two of these the Parties have provided ad valorem  
equivalents. 
6 Trade figures are based on the average value of imports into New Zealand from Thailand for the 
period 2002-2004, which covered 1,994 tariff lines.   WT/REG207/3 
Page 6  
 
  13 per cent of 2002-2004 imports, is to be duty-free.  The Agreement provides that New Zealand will 
not apply any customs duty for any product of Thai origin as from 2015.  (See Chart II.1). 
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Tariff linesTradeTariff linesTradeNew Zealand Thailand
EIF Mid-term End of implementation periodChart II.1
Overall tariff elimination in TNZCEP
  For New Zealand, 2010; for Thailand, 2015 
 For New Zealand, 2015; for Thailand, 2025
Sourc e: Trade and tariff line data submitted by the Parties.Percentage liberalized
a
bb
a
 
 
15. Upon entry into force, Thailand  liberalized its duties on goods of New Zealand origin for 
54 per cent of its tariff lines7;  the corresponding share in terms of Thailand's 2002-2004 imports from 
New Zealand is 51 per cent.8  After ten years, an additional 45 per cent of Thailand's tariff lines, or 
19 per cent of 2002-2004 imports, is scheduled to be  liberalized.  By 2025, trade will be duty and 
tariff-free for all products of New Zealand origin.  (See Chart II.1). 
(c) New Zealand's liberalization schedule 
16. The base rates used by New Zealand for implementing its tariff liberalization scheme already 
provided for 59 per cent of tariff lines being duty free be fore the entry into force of the Agreement.  
Most of the additional 23 per cent of tariff lin es freed on entry into force hold base rates of 
5-7.5 per cent.  By 2010, all tariff lines with base rates up to 10 per cent are scheduled to be free of duty.  Most of New Zealand's 554 tariff lines holding base rates of 11.5-20 per cent will be liberalized in 2015. 
                                                     
 
7 Thailand's tariff schedule is composed of 5,565 lines, usually defined at the HS-2002 6-digit level, 
although a few lines at HS 7-digit le vel are included.  Duties are defined ad valorem  in 4,302 lines:  70 lines 
hold specific duties only;  and 1,193 lines contain both ad valorem  and specific duties. 
8 Trade statistics are based on the average value of imports into Thailand from New Zealand for the 
period 2002-2004, available at the tariff line level.  During 2002-2004, Thailand's imports from New Zealand 
took place on 1,211 tari ff lines which represents 22 per cent of total tariff lines.  WT/REG207/3 
 Page 7 
 
 
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,00020052006200720082009201020112012201320142015Chart II.2
New Zealand's duty elimination under the TNZCEP
Number of duty-free lines (cumulative)
Base rate = 5%-7.5% Base rate = 0% Base rate > 10% Base rate = 10%
Source : Data provided by the Parties
 
17. Table II.1 shows the number of HS 8-digit tari ff lines eligible for duty-free treatment by 
New Zealand after entry into force, organized by the year in which they are liberalized and the 
HS Section to which they pertain.  Out of the to tal of 1,292 products, eight are agricultural products 
(under HS Chapter 21 – Miscellaneous Edible Preparati ons), subject to liberalization three years after 
the entry into force, while the rest cover a range of industrial products in 35 HS Chapters.  Most of the 
products falling within the longest period of ten years are textiles and footwear. 
Table II:1  
New Zealand:  Products s ubject to duty-free treatment 
Year of duty-free treatment  HS Section and description 
2007 2008 2010 2015 Total 
Total 1 114 518 659 1292 
IV Prepared foodstuffs; Beverages; Tobacco     8  8 
VI Products of the chemical or  allied industries   8   8 
VII Plastics and articles thereof; Rubber and articles thereof   81 9 90 
VIII Raw hides and skins, leathe r, furskins, etc.    2 12 14 
IX Wood and Articles of wood, etc.   24  24 
XI Textiles and textile articles    569 569 
XII Footwear, headgear, umbre llas, sun umbrellas, etc.     67 67 
XIII Articles of stone, plaster, cement, asbestos, etc.   4 11  15 
XIV Natural or cultured pearls, etc.  11   11 
XV Base metals and article s of base metal 1 58 237  296 
XVI Machinery and mechanical appliances; etc.  3 65  68 
XVII Vehicles, aircraft, vessels and asso ciated transport equipment    69  69 
XX Miscellaneous manufactured articles   30 21 2 51 
Source: TNZCEP Agreement. WT/REG207/3 
Page 8  
 
  (d) Thailand's liberalization schedule 
18. At entry into force of the Agreement, Thai im ports originating in New Zealand were free of 
duty on 2,996 tariff lines.  These included items wh ich were previously duty-free and most of the 
tariff lines on which Thailand's base  rate ranged from one to five per cent, as well as a few products 
holding higher base rates.  By 2010, only 551 tari ff lines (i.e. ten per cent of the total) plus the 
ten lines under TRQs will not yet be fully liberalized by Thailand;  by 2020, duties will remain on 
five tariff lines, all under TRQs. 
0 1,000 2,000 3,000 4,000 5,000 6,0002005200620072008200920102011201220132014201520162017201820192020Chart II.3
Thailand's duty elimination under the TNZCEPa
Number of duty-free lines (cumulative)
a The chart does not show the ten lines under TRQs, nor the 70 tariff lines holding specific base rates only.  
For tariff lines with both specific and ad valorem base rates, the latter were taken into account.
Sourc e: Data provided by the PartiesBase rate = 1%-5% Base rate = 0% Base rate = 17%-50%Base rate = 7.5%-
15%Base rate = 51%-
226%
 
19. The TNZCEP provides that Thailand may apply TRQs on ten agricultural products imported 
from New Zealand, with decreasing in-quota duty rat es and increasing quota levels over time:  on five 
products, quota and tariff elimination is scheduled fo r 2020, while for the remaining five products the 
applicable deadline for elimination is 2025.  (See Table II.2). 
 
  
 
  
 
  
  WT/REG207/3 
 Page 9 
 
 
Table II.2  
Thailand:  Tariff-Rate Quotas for C ertain Agricultural Sensitive Products9 
TRQ at entry into force (2005) Liberalization scheme 
HS line number (Product description)  
Quantity In-quota duty  Quantity In-quota duty  
040110, 040120, 040130 (Milk and cream, not concentrated 
nor sweetened) 
220290ex (Beverages containing milk) 120 tons 20% Until 2025 : 
+17% every 5 
years Until 2025 : 
-1 % point every 
year 
040210 (Milk and cream, concentrated or containing added sugar etc.) no additional quota Quota-free in 2025 
070110, 070190 (Potatoes, fresh or chilled) 30.2 tons 27% 
070310, 071220 (Onions and shallots, fresh and dried) 36.5 tons 27% Until 2020 : 
-1 or -2 % point 
per year 
120991 ex (Onion seeds.) .315 tons 30% Until 2020 : 
+5% per year Until 2020 :  -2 % 
point per year 
Source: TNZCEP Agreement.  
20. Table II.3 shows the staged tariff liberalization for Thailand's imports from New Zealand, by 
the HS Section to which they pertain and the y ear of duty elimination.  Out of the total of 
2,568 products, 513 (or 20 per cent) are agricultural products, with the rest covering a broad range of 
industrial products.  The majority  of products falling in the tenth year of liberalization (2015) are 
textiles, while all 38 products subject to liberaliz ation in 2020 and the five products subject to 
liberalization in 2025 are agricultural products. 
Table II.3: 
Thailand:  Products subject to  scheduled duty-free treatment10 
HS Section and description Year of duty-free treatment 
 2006 2007 2008 2009 2010 2012 2015 2020 2025 Total 
Total 1 10 1 401 1584 8 520 38 5 2568 
I Live animals; Animal products   1 60 53  16 33 4 167 
II Vegetable products    9 145  3 5  162 
III Animal or vegetable fats a nd oils etc.    7 32     39 
IV Prepared foodstuffs; Beverages; etc.     28 105  11  1 145 
V Mineral products    9 13     22 
VI Products of the chemical or allied inds.   2  28 68  9   107 
VII Plastics & articles thereof; Rubber etc.  1  21 116  2   140 
VIII Raw hides and skins, leather      1 21  1   23 
IX Wood and articles of wood; etc.    6 37 8 7   58 
X Pulp of wood etc.  1  14 113  3   131 
XI Textiles and textile articles     8  462   470 
XII Footwear, headgear, umbrellas      48     48 
XIII Articles of stone, plaster, cement, etc.     2 47     49 
XIV Natural or cultured pearls     10     10 
XV Base metals and articles thereof   1  59 320  3   383 
XVI Machinery and mechanical appls.; etc. 1 5  72 228  3   309 
XVII Vehicles, aircraft, vessels etc.    2 70     72 
XVIII Optical, photographic, etc.    81 50     131 
XX Misc. manufactured articles     2 100     102 
Source: TNZCEP Agreement. 
                                                      
9 The out-of-quota duty rate for all these items is the MFN rate with margins of preference of 10 %. 
10 This table includes those ten tariff lines subject to tariff quotas which are progressively liberalized to 
zero.  Only the in-quota tariff rate is taken into account. WT/REG207/3 
Page 10  
 
  2. Rules of origin 
21. Disciplines regarding rules of origin are set out in Chapter 4 of the Agreement.  Article 4.1 
contains the definitions of terms used in Chapter 4, Articles 4.2-4.3 relate to the rules of origin 
themselves, the procedural aspects of rules of origin are dealt with in Articles 4.4-4.8 and customs procedures and co-operation are included in Chap ter 3 of the Agreement and in the Cooperative 
Arrangement signed by the Parties’ customs services (the latter two issues are dealt with in 
paragraphs 49-54 below).   
22. Basic requirements for a good to be considered originating (Article 4.2) are as follows: 
(a) the good is wholly obtained in the territory of the Parties;
11 or 
(b) the good is made up entirely of materials qua lifying in their own right as originating 
in New Zealand or Thailand and results from processes performed entirely in the 
territory of the Parties;  or 
(c) the good (i) satisfies the specific require ments laid down in Annex 2 of the 
Agreement – normally a change in tariff classification (CTC) requirement for non-originating goods;  (ii) results from pr ocesses performed entirel y in the territory 
of the Parties;  and (iii) did not enter the commerce of a non-party after export from 
the first Party and before import into the other Party; or 
(d) the value of all the non-originating materials that do not undergo the required CTC 
does not exceed ten per cent of the f.o.b. value of the good (tolerance  rule).   
The Agreement states that the c.i.f. and f.o.b. valua tion of goods is to be made in accordance with the 
WTO Customs Valuation Agreement. 
23. The TNZCEP does not provide for regime-wide rule s of origin, but lists (in Annex 2) specific 
criteria that non-originating materials have to meet so that the final good acquires originating status. 
24. In the vast majority of cases, origin is granted if all non-originating materials comply with the 
required Annex 2 CTC.  These changes are specified  at the HS chapter (CTCh, 2-digit), heading 
(CTH, 4-digit) or subheading (CTS, 6-digit) leve ls, with CTS and CTH being the first and second 
most common requirements, respectively.  In ex ceptional cases - in particular as regards textiles and 
clothing - changes from the same chapter, heading or subheading are not allowed.  Except in cases 
where the applicable rules of origin requir es a minimum regional value content (RVC), goods 
produced by minimal operations or processes shall not be treated as originating goods even where those minimal processes or operations meet the CTC requirements.   
25. The requirement for a minimum RVC only applies in the case of textiles, clothing and 
footwear (HS Chapters 50-64), which are subject to both a CTC requirement - at the chapter or 
heading levels - and a RVC requirement of no less than 50 per cent of originating materials.  The 
RVC is calculated as the difference of the f.o.b. value of the good minus the c.i.f. value of all the 
non-originating materials, over the f.o.b. value;  details regarding its calcu lation are contained in 
Article 4.3.  
26. For goods of Chapters 27-40, two alternative rules of origin exist, i.e. the CTC rule specified 
in Annex 2 or a general rule according to which ch emical products are considered originating if they 
are the product of a “chemical reaction” as define d in headnote 4 of Annex 2.  In a few cases, 
                                                     
 
11 This concept applies to goods that are entirely grown, fished or mined in the territory of a Party;  
waste and scrap derived from production in the territory of  a Party;  and goods produced entirely in the territory 
of a Party exclusively from wholly obtained goods.   WT/REG207/3 
 Page 11 
 
 
technical tests requiring that some production processes take  place in the territory of the Parties apply;  
in a few other instances, a sourcing requirement exists and requires that a particular input is 
originating.  The manner in which accessories, sp are parts or tools, fungible goods, packaging 
materials and containers, and indirect materials are valued when determining the origin of the goods is 
provided for in Articles 4.2(5)-4.2(11). 
27. Articles 4.2(1)(b) and 4.2(2) allow for full bila teral cumulation between Parties, i.e. both in 
terms of goods/materia ls (originating goods or materials from one Party incorporated in a good of the 
other Party are considered originating from the territory of the latter Party) and of production 
processes.  A tracing test is therefore included in the rules of origin.12 
28. An absorption principle, whereby an intermedia te material (i.e. a material that is also 
produced by the producer of the final good) that qua lifies as originating is considered 100 per cent 
originating once incorporated into a final good, is contained in Article 4.2.1.  
29. Minimal, non-qualifying operations or processes ca rried out in the territory of the Parties 
which do not confer origin are defined in Article 4.1(g) as “operations or processes which contribute 
minimally to the essential characteristics or properties of goods”;  an illustrative list is also included. 
30. The Agreement does not contain any special cl ause relating to drawback;  therefore, the 
Parties’ general rules relating to drawback apply.  For New Zealand, this means that tariffs due on 
non-originating products incorporated in a fi nal product are refunded once the final product is 
exported [to Thailand], and that excise duties are refunded for g oods that have been produced in 
New Zealand and are exported to Tha iland.  For Thailand, tariffs paid on imported goods which have 
undergone production, mixing, assembling, or packing in Thailand are refunded, provided the final 
good is exported [to New Zealand] within one year  from the date of importation;  the importer may 
place a bank guarantee or a guarantee issued by the Ministry of Finance in lieu of the payment of import duty.  
31. Article 4.2(1)(b) includes two requirements vis-à-vis  territoriality: (i) outward processing is 
not authorized and the granting of originating stat us requires that production be performed entirely in 
the territory of the Parties;  and (ii) only simple tr anshipment is allowed, in  the sense that originating 
goods must not enter the commerce of a non-party af ter export from one Party and before import into 
the other.  The non-respect of either of these conditio ns will result in the loss of originating status.  
Box II.2:  Rules of Origin: Basic Features at a Glance 
• No regime-wide rules of origin. 
• Product specific criteria: 
              - Wholly obtained or entirely produced goods 
              - In general, CTC at the chapter, heading or subheading levels 
              - For textiles, clothing and footwear, CTC plus RVC at 50%               - For goods of HS 27-40,  two alternative rules: CTC or “chemical reaction” 
              - Process rules only in very few cases. 
• Bilateral and full cumulation. 
• Tracing test applies. 
• Absorption principle applies. 
• Tolerance rule at a maximum of 10%. 
• Duty drawback possible. 
• Outward-processing not authorized. 
• Simple transhipment authorized.  
 
Source: TNZCEP Agreement. 
                                                      
12 In the tracing test, all the originating parts of materials used in the final good and all the processes 
made within the Parties count towards the granting of origin. WT/REG207/3 
Page 12  
 
  3. Export duties and charges, and quantitative restrictions 
 
32. Parties are not allowed to adopt or maintain any non-tariff measures on the export of any 
good to the other Party, except in accordance with WT O rights and obligations or other provisions of 
the Agreement (Article 2.7);  the latter point refers in particular to administ rative fees and formalities 
(Article 2.5) and the Agreement’s ge neral exceptions (Articles 15.1-15.3). 
33. The Agreement does not deal with export duti es;  therefore, any existing export duties, 
charges and quantitative restrictions applied on an MFN basis in accordance wi th the WTO also apply 
to the Parties’ bilateral trade.
13   
C. REGULATORY PROVISIONS OF THE AGREEMENT  
1. Standards 
(a) Technical barriers to trade 
34. Chapter 7 of the Agreement provides for a re gulatory framework for technical regulations, 
standards and conformity assessment procedures related to products or  processes and production 
methods;  its aims are to facilitate trade and investme nt between the Parties;  to complement bilateral 
agreements and arrangements between the Parties rela ting to technical regulations;  and to build on 
the mutual recognition arrangements developed by in ternational and regional organizations, including 
APEC (Article 7.2).14  Article 7.3 reaffirms the Parties' existing rights and obligations under the 
WTO Technical Barriers to Trade (TBT) Agreement. 
35. The disciplines of Chapter 7 apply to all goods trad ed between the Parties, regardless of their 
origin (Article 7.4);  they cover standards,  technical regulations and conformity assessment 
procedures other than those relating to government procurement and those that constitute a sanitary 
and phytosanitary (SPS) measure (Article 7.3(1)).  Food standards which are not SPS measures are 
regulated by this Chapter and also by Articles 6.5-6.10.   
36. In Article 7.5 and 7.6, the Parties commit th emselves to work towards (i) the harmonization 
of their technical regulations;  (ii) the compatibility  of their conformity assessment procedures;  and 
(iii) consideration to accepting as equivalent thei r technical regulations and conformity assessment 
procedures.15  Bilateral co-operation on sta ndards-related measures (Article  7.7 and 7.8) is enhanced, 
in particular through the establishment of contact poi nts;  they shall meet at least annually and report 
jointly to the TNZCEP Joint commission on the impl ementation and operation of this Chapter.  
Article 7.9 states that any agreed principles and pr ocedures to standards, technical regulations and 
conformity assessment procedures between the Parties, as well as the implementation of such matters, 
are to be recorded as Annexes and Implementing Ar rangements of this Chapter, respectively.  The 
Parties have begun discussions on co-ordinating their mandatory requirements on electromagnetic 
compatibility.  
                                                      
13 See Section III.3 of WT/TPR/S/115 and WT/TPR/S/123 for information on New Zealand and 
Thailand, respectively.  
14 The Parties affirm their intention to adopt and apply the principles set out in the APEC Information 
Notes on Good Regulatory Practice in Technical Regulation  with respect to conformity assessment and 
approval procedures in meetin g the obligations under the WTO TBT Agreement  (Article 7.3(4)). 
15 The Agreement states that existing mutual reco gnition arrangements in relation to acceptance of 
conformity assessment procedures shall be utilized to the maximum extent possible.  WT/REG207/3 
 Page 13 
 
 
(b) Sanitary and phytosanitary measures and food standards 
37. Chapter 6 provides a framework for SPS m easures whose objectives are to uphold and 
enhance implementation of the WTO SPS Agreement;  facilitate trade while protecting human, animal 
or plant life or health;  and to strengthen Pa rties’ bilateral co-ope ration and consultation on 
SPS matters and their collaboration in relevant inte rnational bodies.  The disciplines of the Chapter 
apply to all of the Parties’ SPS measures and f ood standards which are SPS measures that may affect 
trade, irrespective of the origin;  food standa rds which do not constitute an SPS measure are not 
covered by this Chapter, with the exception of th e disciplines of Articles 6.5-6.10 (Article 6.2). 
38. The Parties reaffirm their existing rights a nd obligations under the WTO Agreements on SPS 
and, where relevant, on TBT (Article 6.4).  Th e Chapter provides for (i) enhanced communication 
between the Parties’ competent authorities, in pa rticular by establishing contact points and by 
providing for an early exchange of information on new or proposed changes to SPS measures and 
food standards;  (ii) a mechanism for dealing with ur gent problems of health protection (in particular 
by providing notice of measures taken within one  day);  (iii) co-operation in cases of the 
non-compliance of imported goods with the SPS or food standards requirements;  and (iv) the 
establishment of a Joint SPS Committee, due to meet at least once a year (respectively, Articles 6.5, 
6.6, 6.7, 6.8).  A major task of this body will be to draft and review implementing arrangements 
related to harmonization, equiva lence, control, inspection and approval procedures of SPS measures 
and food standards.16  This body may also establish technical working groups as required.   
39. The Agreement provides for consultations on SPS matters arising under this Chapter 
(Article 6.10);  should these fail to settle the matter either Party may forward the issue for 
consideration to the TNZCEP Joint Commission and, where necessary, have recourse to the dispute 
settlement provisions of the WTO Agreement.  Th e dispute settlement procedures of the TNZCEP do 
not apply vis-à-vis  the provisions of this Chapter (Article 6.13).  
2. Safeguard mechanisms 
40. Chapter 5 contains provisions for the admini stration of trade remedies under the TNZCEP.  
Part I of the Chapter deals with general trade re medies, including global safeguards while Part II deals 
with bilateral safeguards;  the latter (Article 5.4)  provides for three categories of measures, namely  
"transitional", "provisional" and "special" safeguard  measures (SSG) for certain sensitive agricultural 
products.  The application of bilateral safeguard measures is limited to the duration of the good's 
transition period or in accordance with Annex 3 ti meframes in the case of SSG.  The disciplines 
applying to each category of safeguard measures ar e detailed below, and summarized in Table II.5. 
(a) Global safeguards 
41. Parties reaffirm in Article 5.3 that, in the event of a global safeguard measure, the relevant 
rights and obligations are those of Article XI X of GATT 1994, the WTO Agreement on Safeguards 
and any other relevant provisions in the WTO Ag reement.  The Agreement does not confer any 
additional rights or obligations vis-à-vis  global safeguards, with the exception that the Party taking the 
safeguard measure may exclude the imports of or iginating goods from the other Party from such 
action if such imports are not a cause of serious injury or threat thereof.  
                                                      
 16 The first Joint SPS Committee Meeting was held on  4 May 2006 in Bangkok.  As required by the 
side letter to the TNZCEP Agreement, the Parties report ed the status and progress as follows:  Thailand had 
completed the revised import conditions for seed potatoes from New Zealand.  New Zealand had completed the finalization of Import Health Standards (HIS) for five  commodities, namely lychee, mangosteen, longan, ginger 
and chilled durian from Thailand.  New Zealand reported that durian (whol e fruit) from Thailand is under 
consideration and will be finalized in the near future. WT/REG207/3 
Page 14  
 
  (b) Bilateral safeguards 
42. A Party may impose a “transitional safeguard measure
” (Articles 5.5-5.6) on an originating 
good if there is an import surge (in absolute term s or relative to domestic production) causing or 
threatening to cause serious injury to the domest ic industry of the importing Party producing a 
like or directly competitive good.17  Disciplines attached to such action include the need for prior 
investigation by the Party's competent authorities;  scope and duration of the measure;  progressive 
liberalization;  prohibition of subjecting a good to both bilateral safeguards a nd safeguards applied in 
the WTO context and of safeguards on goods indicat ed as “SSG” in Annex 1 and on those subject to 
TRQs in Annex 1.3;  and compensation. 
43. Provisional safeguard measures  (Article 5.8) may be applied in “highly unusual and critical 
circumstances” where delay would cause injury which would be difficult to repair;  this requires a 
preliminary determination that there is clear evid ence that the increased imports have caused or are 
threatening to cause serious injury.  Any additional duties collected as a result of the measure have to 
be refunded in the case of a negative finding of injury or threat thereof. 
(c) Special safeguard measure 
44. Article 5.11 allows SSGs during a trans ition period lasting until 2015 or 2020 for 
41 agricultural products (at the HS 6-digit le vel) specified as sensitive by Thailand;18  these are listed 
in Annex 3 to the Agreement (Article 5.11) a nd are also referred to as “SSG” in Annex 1 
(see Table II.4 for a summary).  For each of these products, imports beyond a pre-determined trigger level - increased by five per cent (ten per cent for fr ozen potatoes) each year – may, for the remainder 
of the calendar year, have to pay Thailand’s MFN rate  or base rate, whichever is lower, instead of the 
preferential rate. 
45. The SSG regime will be reviewed within three years of entry into force of the Agreement, 
taking into account relevant intern ational, regional and bilateral tr ade developments;  further, if 
Thailand enters into an agreement with a thir d country and does not provide for SSG on a good(s) 
specified in Annex 3, and where the third c ountry is a substantial supplier of the good(s), 
consultations will take place aiming at a withdrawal of the good(s) from Annex 3. 
Table II.4 
Thailand’s SSG in the TNZCEP  
End of Transition Period HS Chapter Number of lines 
2015 2020 
2 23 0 23 
4 13 3 10 
5 1 0 1 
8 2 2 0 
20 2 2 0 
Source: TNZCEP Agreement. 
 
 
 
 
                                                      
17 "Serious injury" is defined in TNZCEP Article 5.4(g) as "a significant overall impairment in the 
position of a domestic industry". 
18 New Zealand has not made use of this clause.  WT/REG207/3 
 Page 15 
 
 
Table II.5 
Synopsis of TNZCEP Emergency Safeguards 
Type of Safeguard 
Requirements 
Bilateral Special19 
Trigger Rise in imports In absolute terms or relative to 
domestic production Imports in excess of the 
specified volume trigger level 
for any given year 
Criteria  Serious injury or ac tual threat thereof 9 *  
Measures 
allowed Suspension of further duty reduction 9  
 Increase in duty rate  Current MFN rate, or MFN rate 
preceding EIF, or for those after 
2009, preferential rate four 
years before, whichever is lower MFN rate or base rate, 
whichever is lower 
Timing Maximum duration, including extension  2 y ears plus 1 year extension Calendar year 
  120 days (provisional measures)  
 Safeguard measure vis-à-vis  the transition 
period of the good concerned   To be terminated within 2 years 
of the end of the good's 
transition period, and no more 
measures after that In accordance with 
Annex 3 timeframes 
Conditions or 
limitations  Information of the institution of a proceeding 
through written notice 9 9 
 Consultation 9 9 
 Prior investigation (Art. 5.6(1)) Except for provisional measures  
 Re-imposition of safeguard measures on the 
same good  After 3 years since the previous 
measure has elapsed  Possible at every  
calendar year  
 Progressive liberalization  Fo r measures exceeding 1 year  
 Compensation  For measures exceeding 2 years   
 Possibility of retaliation (Art. 5.10) 9  
 Prohibition of multiple trade-defence measures 
applied simultaneously  9 9 
*  The additional requirement of injury that would be difficult to repair app lies in the case of provisional measures. 
Source: TNZCEP Agreement. 
 
3. Anti-dumping and countervailing measures 
46. Article 5.1 of the Agreement incorporates the rights and obligations of the WTO Agreement 
on Implementation of Article VI of GATT 1994  as the guiding rule for the application of anti-dumping 
duties on originating trade between the Parties, while emphasizing the possibility of providing for constructive measures in lieu of anti-dumping measures in particular vis-à-vis  exports from Thailand. 
4. Subsidies and Countervailing Measures 
47. Article 5.2 incorporates the rights and obligations of the WTO  Agreement on Subsidies and 
Countervailing Measures  into the Agreement.    
48. Besides that general rule, Article 2.6 of the Agreement includes a special provision related to 
export subsidies for agricultural products.  In particul ar, this Article prohibits the use of any form of 
export subsidy on intra-trade of agricultural goods an d provides for consultations to be held in cases 
of any conflict in this respect.  It also commits the Parties to work toward s an agreement in the WTO 
on the elimination of those subsidies. 
                                                     
 
19 Used by Thailand only. WT/REG207/3 
Page 16  
 
  5. Other regulations 
(a) Customs-related procedures 
49. Chapter 3 and the Cooperative Arrangement between the New Zealand Customs Services and 
the Customs Department of the Kingdom of Thailand , aim at simplifying and harmonizing customs 
procedures;  ensuring the predictability, consistenc y and transparency of customs laws;  facilitating 
trade;  and promoting cooperation between the resp ective customs administrations while maintaining 
effective border protection.  These provisions apply to all trade between the Parties regardless of its 
origin. 
50. Article 3.6 provides that the valuation of goo ds will be determined in accordance with the 
provisions of Article VII of GATT 1994 and the WTO Customs Valuation Agreement.  Customs 
procedures and practices are to be transparent and shall conform to international standards to the 
extent possible;  they will be periodically reviewed  with a view to further facilitating bilateral trade 
(Article 3.5).  Customs user charges are allowed, provided their amount is limited to the approximate 
cost of services rendered and do not represent an indirect protection to domestic goods nor a taxation for fiscal purposes (Article 2.5). 
51. Articles 3.7-3.14 provide for a number of measures  designed to facilitate bilateral trade;  these 
include the provision of mutual assistance in order to  prevent breaches of customs legislation;  a best 
endeavour clause for advanced notice of significant changes to laws, regulations or policies governing 
importation likely to affect the operation of the Agr eement;  right of appeal (for the importer, exporter 
or any other affected person) without penalty rega rding customs rulings, determinations or decisions, 
both at the administrative and judicial levels;  a commitment to provide rulings on the tariff 
classification of goods before they  are exported (advanced ruling);  consultations between the customs 
administrations in cases of disputes on the classifica tion, origin or valuation of goods and regarding 
security of trade and/or movements of craft;  en couraging the implementation of paperless trading 
initiatives;  facilitating the clearan ce of low-risk goods; and establishment of contact points in both 
Parties to address customs related enquiries. 
52. The Cooperative Arrangement, signed by the Head s of the Parties’ customs administrations, 
establishes the basis and scope of  cooperation on customs-related i ssues, including law enforcement, 
exchange information, consultati ons regarding customs-related disputes and requests for assistance.  
Customs-related procedures are also dealt with in Ar ticles 4.4-4.8 of Chapter 4;  these rules refer to 
the recording of costs, the treatment of goods for which preference is claimed, the maintenance of 
records, origin verification and suspension and denial of preferential treatment. 
53. Preferential treatment is not granted on the basis of a “certificate of origin” but rather on a 
“declaration of origin” for a good for which prefer ential treatment is being claimed (Article 4.5).
20  
Such a declaration, of a “self-certification” nature , is to be made on the face of the invoice or any 
other document issued in respect of the good by the exporter, or producer, or other competent person or body (public or private).
21  This declaration is however not  determinative, and the importer 
claiming preferential treatment may be requested to  provide additional evidence on the origin of the 
good (e.g. accounting data);  failure to  provide this may result in the denial of preferential treatment or 
the payment of a guarantee equivalent to the MFN tariff.   
54. Importers may apply ex-post for the refund of du ties paid on a good that would have qualified 
as originating (Article 4.5(6));  no deadline is set for such application in the Agreement but may exist 
                                                      
20 This requirement may be waived by the Parties in accordance with Article 4.5(7). 
21 The wording of such a declaration can be found at: 
http://www.customs.govt.nz/ about/News/nz+thailand+ce p+agreement+120505.htm   WT/REG207/3 
 Page 17 
 
 
in Parties’ national legislations.22  Disciplines on origin verification by the importing Party’s customs 
administration (Article 4.7) may include requests for information addressed to the importer, exporter 
or producer;  visit to the premises of the producer or exporter in the exporting Party, subject to prior written notification and consent;  and requests to the e xporting Party to conduct an origin verification.  
Preferential treatment may be temporarily suspen ded pending an origin verification action and/or 
denied (Article 4.8(1) and (2), respectively).  The denial of preferential treatment, or the recovery of 
unpaid duties, may take place in cases where goods do not meet the requirements of Chapter 4 of the Agreement;  the producer, exporter or importer of  the goods fail to comply with any of the 
requirements of Chapter 4;  or a negative finding results from the origin verification action.  The 
general right of review and appeal embodied in Article 3.8 also applies in these cases.  
(b) Electronic commerce 
55. Chapter 10 sets out a number of provisions designed to promote electronic commerce 
(e-commerce) between the Parties.  In particular, it provides that Parties (i) will maintain their current 
practice of not imposing customs duties on electronic transmissions between them;  (ii) agree to minimize the regulatory burden on e-commerce and ensure that their regulatory frameworks support 
industry-led development of e-commerce;  (iii) to th e extent possible, agree to provide protection for 
consumers using e-commerce that is at least equivalent to that provided to other consumers;  (iv) will 
take appropriate measures to protect personal data of users of e-commerce;  (v) accept the electronic format of trade administration documents as the lega l equivalent to paper doc uments, subject to some 
exceptions;  (vi) will encourage co-operation in research and training activities designed to develop 
and promote e-commerce.  The dispute settlement provisions of the Agreement do not apply to the 
provisions of this Chapter, with the exception of issues relating to waiving customs duties on 
e-commerce (Article 10.8). 
(c) Competition policy 
56. Chapter 11 sets out a framework for co-ope ration and coordination on competition policy 
between the Parties aiming at the promotion of fair competition and curtailment of anti-competitive 
practices, on the basis of the APEC principl es of non-discrimination, comprehensiveness, 
transparency and accountability, as well as competition principles of creating and maintaining open and competitive markets (Article 11.2).  In partic ular, the Parties (i) undertake to ensure that all 
commercial activities are subject to generic or rele vant sectoral competition laws in force in their 
respective territories, with the possibility of  exempting some specific measures or sectors 
(Articles 11.4-11.5);  (ii) agree that competition laws, as well as their enforcement, are to be 
consistent with the principles of transparency, timeliness, non-discrimination, comprehensiveness and 
procedural fairness;  (iii) agree to cooperate on issues of competition law enforcement, including 
through the exchange of information and thr ough consultations on competition issues adversely 
affecting bilateral trade and investment;  (iv)  agree on technical co-operation activities to be 
encouraged;  (v) agree to make their competition laws publicly available.  The dispute settlement 
provisions of the Agreement do not apply to th e provisions of this Chapter (Article 11.10). 
(d) Intellectual property 
57. In Chapter 12, the Parties reaffirm that th ey shall fully respect the provisions of the 
WTO Agreement on Trade-Related Aspects of Intellectual Property Rights  and other multilateral 
agreements relating to intellectual property to whic h both are parties (Article 12.2).  The Parties are 
committed to maintain IPR regimes that promote innovation and protect legitimate interests of the 
community in accordance with TRIPS (Article 12.3. 2).  The Parties also recognize that each Party 
may wish, consistent with its obligations unde r the WTO Agreement, to establish appropriate 
measures to protect traditional knowledge, genetic r esources and folklore (Article 12.5(d)).  In 
                                                     
 
22 According to the Thai customs law, duties can be refunded within two years from the date paid. WT/REG207/3 
Page 18  
 
  addition, the Chapter provides for enhanced bilateral co-operation on inter alia  enforcement of the 
intellectual property rights’ protection, prevention of trade in counterfeit goods and the exchange of 
information.   
(e) Government procurement 
58. According to Chapter 13 of the Agreement, the Parties shall work progressively to reduce and 
eliminate barriers to the supply of goods and servi ces between the Parties and improve transparency in 
the context of government procurement.  The Parties reaffirm their desire to promote and implement, 
to the extent possible, the APEC principles on gove rnment procurement.  The Chapter establishes a 
mechanism for exchange of information on gove rnment procurement policies, practices and 
procedures, and procurement opportunities, through contact points established in each Party.  A 
working group of government representatives dealing with government procurement is established;  it 
shall report to the Joint Commission within 12 months  of the entry into force of the Agreement on 
recommendations on the commencement of  bilateral negotiations for expa nding the application of this 
Chapter.
23  The dispute settlement provisions of the Agre ement do not apply to the provisions of this 
Chapter unless specifically authori zed in a future expansion of this Chapter (Article 13.6). 
D. SECTOR -SPECIFIC PROVISIONS OF THE AGREEMENT  
59. There is no specific provision in the Agreement regarding trade in goods in any particular 
sector, other than the provisions for agricultural export subsidies provided for in Article 2.6 (see paragraph 48 above) and the emergency clause fo r agricultural goods provided for in Article 5.11 
(see paragraphs 44-45 above).   
E. G
ENERAL PROVISIONS OF THE AGREEMENT  
1. Exceptions and reservations 
60. General exceptions and reservations are laid  down in Chapter 15 of the Agreement.  
Article 15.1 deals with general exceptions for tr ade in goods, by basically incorporating into the 
TNZCEP Article XX of the GATT 1994.  Security exceptions (Article XXI of the GATT 1994) are included in Article 15.3 of the TNZCEP.  Article 15. 5 stipulates, among others, that restrictive import 
measures taken to safeguard a Party's balance of payments (BOP) must be in accordance with the 
GATT 1994 and the Understanding on the Balance-of-Payments Provisions of the GATT 1994 .  Other 
exceptions and reservations include measures concer ning Disclosure of Information (Article 15.4), 
Measures for Macro-Economic and Financial Stability (Article 15.6), Taxation Measures 
(Article 15.7) and a derogation vis-à-vis  the Treaty of Waitangi (Article 15.8),
24 allowing 
New Zealand to provide more favour able treatment to Maori in respect of matters covered by the 
TNZCEP and excluding from the dispute settlement pr ovisions of the Agreement the interpretation of 
the Treaty of Waitangi per se , but providing for the possibility for Thailand to challenge whether any 
measure is inconsistent with its rights under the TNZCEP. 
2. Accession 
61. Article 18.5 states that the TNZCEP is open to accession or association, on terms to be agreed 
between the Parties, by any WTO Member or by any other State or separate customs territory. 
                                                      
23 The Parties have indicated that the first. 
 24 The Treaty of Waitangi is New Zealand’s founding document, signed in 1840 among over 500 Maori 
chiefs and representatives of the British Crown.  WT/REG207/3 
 Page 19 
 
 
3. Institutional framework 
62. Chapter 14 of the Agreement deals with th e transparent administration of laws and 
regulations.  It includes disciplines on the publicat ion of laws, regulations, administrative rulings, 
procedures and policies relating to matters covered by the Agreement (Article 14.1);  administrative 
proceedings (Article 14.2);  and review and a ppeal of administrative actions (Article 14.3). 
63. Chapter 16 of the Agreement deals with institu tional provisions.  Article 16.1 provides for the 
establishment of a Closer Economic Partne rship Joint Commission (CEP Joint Commission).25  I t s  
mandate is specified in Article 16.2, which includes inter alia  the review of the general functioning of 
the Agreement; the consideration of proposals to amend the Agreement; the establishment of 
permanent and ad hoc  subsidiary bodies and the referral and c onsideration of matters raised by them.  
Article 16.3 provides for the format, timing and location of the meetings of the CEP Joint 
Commission.  Within five years from entry into fo rce – i.e. by 1 July 2010 – and every five years 
thereafter, the Parties shall undertake a general review of the TNZCEP, at Ministerial level, 
comprising matters relating to liberalization, co- operation and trade facilitation (Article 16.5).  
Additional institutional provisions include the designati on of a contact point for all matters covered by 
this Agreement and for which a specific contact poi nt has not been provided for elsewhere in the 
Agreement (Article 16.4). 
4. Dispute settlement 
64. Chapter 17 sets out the institutional arrangements that apply to the avoidance and settlement 
of disputes between the Parties on the interpre tation, implementation or application of the 
Agreement.26  Article 17.1(2)-(3) grants discretion to the complaining Party as to the choice of the 
forum where the dispute is to be settled (forum el ection clause);  once dispute settlement procedures 
have been initiated under one forum, that forum shall be used to the exclusion of the others (exclusive 
forum clause), except when disputes relate to substa ntially separate and distinct rights or obligations 
under different international agreem ents, or upon both Parties' expr ess agreement to have recourse to 
dispute settlement procedures under this Chap ter and another international agreement 
(Article 17.1(5)). 
65. Chapter 17 encourages the resolution of conflicts through consultations (Ar ticle 17.2);  it also 
states that the Parties may resort to good offices, conciliation or mediation at any time, and that these 
may continue pending the work of an arbitral tr ibunal (Article 17.3).  If the consultations fail to 
resolve the matter, the complaining Party may requ est in writing to the other Party the establishment 
of an arbitral tribunal;  upon delivery of such a request, the tribunal will be established (compulsory 
jurisdiction ) (Article 17.4 and 17.5(1)).  The Parties ma y decide, at any time and by agreement, to 
suspend or terminate the proceedings of an arbitral  tribunal (Article 17.8);  similarly, the arbitral 
tribunal may at any stage propose to the Parties to solve the dispute amicably.  The final award of an arbitral tribunal is binding and no right of appeal is provided for.  The arbitral tribunal may however 
reconvene and issue a binding determination in cases of  non-implementation of its award.  A synoptic 
description of the main elements of the dispute settlement provisions unde r TNZCEP is provided in 
Chart II.4.     
                                                     
 
25 In addition, a Joint Committee on SPS is esta blished under Article 6.8 of the Agreement. 
26 Chapter 17 does not apply to matters arising under Chapter 6 on SPS and other chapters whose 
provisions confer no specific right s, namely Chapter 10 on Electronic Commerce (with the exception of the 
waiving of customs duties), Chapter 11 on Competition Policy and Chapter 13 on Government Procurement.  
Further, it applies only partially to issues related to  the Treaty of Waitangi, as explained in paragraph 60. WT/REG207/3 
Page 20  
 
  Chart II.4 
TNZCEP Settlement of Disputes 
 
5. Relationship with other agreements concluded by the Parties 
66. Article 18.6 states that in case of incons istency between the TNZCEP and any other 
agreement to which both Parties are party, the Parti es will consult each other with a view to finding a Consultations 
(Art. 17.2) 
Request for establishment of  
an Arbitral tribunal  (Art. 17.4)  
Composition (Art. 17.5) 
Functions (Art. 17.6) 
Rules of procedure  (Art. 17.7) 67 days (or more if 
ICJ) for composition  
Arbitral tribunal examination 
(Art. 17.7)  Outside information and 
advice (Art.17.7(10))  
Suspension or termination 
by mutual agreement 
(Art.17.8)  12 months 
maximum 
suspension Arbitral tribunal draft award 
to be sent to Parties (Art. 17.9(2))  14 days for 
Parties’ comments 
Arbitral tribunal final award 
Binding, no appeal possible 
(Art. 17.9(3))Generally within 120 
days from Tribunal establishment  Award becomes public  
(Art. 17.9(4))  10 days after release to Parties 
Implementation 
Notification by losing Party of 
proposed implementation action 
(Art. 17.10 )30 days from receipt of final award  
In cases of non-implementation 
Consultations on a mutually  
acceptable solution   (Art. 17.10(3))
Retaliation 
If no notice of implementation, or 
no satisfactory solution, or no 
implementation (Art. 17.11) 30 days from 
commencement of consultations  
Arbitral tribunal reconvened 
 upon request from losing Party 
(Art. 17.11(3))  Two substantive 
meetings 
Arbitral tribunal determination 
Binding, no appeal possible  
 (Art. 17.11(3)-(4))   60 days from receipt 
of retaliation notice  Arbitral tribunal established  60 days 
Good Offices 
Conciliation and  
Mediation  
 
at any time, and may continue 
while an Arbritral tribunal is in 
place (Art. 17.3)  BASIC FEATURES: Forum election clause  
  Exclusive forum clause with some exceptions   Consultation, good offices, conciliation and mediation   Arbitration and compulsory jurisdiction   WT/REG207/3 
 Page 21 
 
 
mutually satisfactory solution.  In the area of taxation, Article 15.7 stipulates that in cases of inconsistency between the TNZCEP and the Partie s’ bilateral agreement on avoidance of double 
taxation and prevention of fiscal evasion, the latter shall prevail. 
67. The Agreement does not commit either Party to ex tend to the Party any benefit it confers to a 
third country under an existing or future  preferential agreement (Article 18.7).
27  In addition, this 
Article clarifies that the Agreement does not pr event the formation or extension of any such 
preferential agreements. 
68. Article 18.8 provides that the Trade Agreement Between the Government of the Kingdom of 
Thailand and the Government of New Zealand  of 10 February 1981 will be terminated on entry into 
force of the TNZCEP. 
69. Table II.6 lists the RTAs to which New Zealand and Thailand are party, and which have been 
notified to the GATT/WTO and are in force.   
Table II.6 
New Zealand and Thailand: Participatio n in RTAs (notified and in force) 
Partner/ 
Agreement  Date of entry  
into force  Type of 
agreement  GATT/WTO Notification 
NEW ZEALAND  
Singapore 01.01.2001 Goods & services 2001 GATT Art. XXIV & GATS Art. V 
Australia (CER) 01.01.1983 Goods 1983 GATT Art. XXIV 
Australia (CER) 01.01.1989 Services 1995 GATS Art. V 
SPARTECA* 01.01.1981 Goods 1981 Enabling Clause 
THAILAND  
Australia 01.01.2005 Goods & services 2005 GATT Art. XXIV & GATS Art. V 
AFTA** 28.01.1992 Goods 1992 Enabling Clause 
Laos 20.06.1991 Goods 1991 Enabling Clause 
GSTP 19.04.1989 Goods 1989 Enabling Clause 
*  SPARTECA - South Pacific Regional Trade and Economic Co operation Agreement: New Z ealand, Cook Islands, Fiji, 
Kiribati, Marshall Islands, Mi cronesia, Nauru, Niue, Papua New Guinea, Solomon Islands, Tonga , Tuvalu, Vanuatu, 
Western Samoa. 
 
**  AFTA - ASEAN Free Trade Area: Brunei, Darussalam, Ca mbodia, Indonesia, Laos, Mala ysia, Myanmar, Philippines, 
Singapore, Thailand, and Viet Nam. 
 
Source:  WTO Secretariat.  
 
 
                                                      
27 Exception to this rule is Article 9.8(2) (Promo tion and Protection of Investments); and Article 15.5 
(Restriction to Safeguard the Balance-of-Payments. WT/REG207/3 
Page 22  
 
  ANNEX 
 
Indicators of trade liberalization under the TNZCEP
 
 
1. A comparison between the scheduled elimination of tariffs applied to the Parties' mutual 
imports and the duty rates applied by New Zeala nd and Thailand to MFN imports is shown in 
Tables A.1 (New Zealand) and A.2 (Thailand), broken into agricultural, industrial and total products.  
Applied MFN duty rates in 2005 serve as a basis to the comparison.28 
2. New Zealand  has a variable MFN tariff structure.  Its (unweighted) average MFN rate (2005) 
is 3.5 per cent on all goods, with a lower average tariff  applied to agricultural goods than to industrial 
products.  Over 58 per cent of New Z ealand's tariff lines are duty-free at an MFN level.  On entry into 
force, Thai exporters enjoyed a relative margin of  preference of 47.4 per cent on industrial products 
vis-à-vis  the prevailing average MFN tariff in 2005, and a relative margin of preference of 
100 per cent in agricultural goods.   
Table A.1 
New Zealand:  Indicators of tariff ra tes applied to MFN and Thai imports 
 
 ALL PRODUCTS Agricultural products Industrial products 
Origin 
of  
goods Average applied 
tariff Average applied 
tariff Average applied 
tariff 
 Year 
Overall 
(%) On 
dutiablea 
(%) Share of 
duty-free 
tariff lines
(%) Overall 
(%) On 
dutiablea
(%) Share of 
duty-free 
tariff lines
(%) Overall 
(%) On 
dutiablea 
(%) Share of 
duty-free 
tariff lines 
(%) 
MFNb 2005 3.5 8.5 58.8 2.1 6.0 65.4 3.8 8.9 57.7 
Thailand 2005 1.7 9.5 82.1 0.0 5.5 99.3 2.0 9.5 79.0 
 2008 1.1 6.8 83.7 0.0 4.0 99.3 1.3 6.9 80.8 
 2010 0.6 6.3 90.9 0.0 0.0 100 0.7 6.3 89.2 
 2015 0.0 0.0 100 0.0 0.0 100 0.0 0.0 100 
 
a "On dutiable" excludes duty-free tariff lines.  
b Specific duties applied by New Zeala nd on 2 tariff lines are excluded from the calculation of applicable 
 MFN rates. 
 
Source : Data furnished by New Zealand (MFN-2005 and preferential rates).  
 
3. Thailand  has a variable MFN tariff structure with  an (unweighted) average MFN rate of 
13.7 per cent on all goods in 2005.  The average appl ied tariff on industrial pr oducts of 11.5 per cent 
is roughly half that applied to agricultural goods.  Du ty-free tariff lines account for 3.8 per cent of all 
tariff lines.  On entry into force, New Zealand's e xporters into Thailand enjoyed a relative margin of 
preference of 55.7 per cent in industrial goods vis-à-vis  the average MFN applied tariff in 2005, and a 
relative margin of preference of 51.3 per cent in agricultural goods. 
    
                                                     
 
28 MFN rates were taken from the respective schedules of New Zealand and Thailand provided by the 
Parties .  WT/REG207/3 
 Page 23 
 
 
Table A.2 
Thailand:  Indicators of tariff rates applied to MFN and New Zealand imports 
Origin 
of 
goods ALL PRODUCTS Agricultural products Industrial products 
 Average applied 
tariff Average applied 
tariff Average applied 
tariff 
 Year 
Overall 
(%) On 
dutiablea 
(%) Share of 
duty-free 
tariff lines
(%) Overall 
(%) On 
dutiablea
(%) Share of 
duty-free 
tariff lines
(%) Overall 
(%) On 
dutiablea 
(%) Share of 
duty-free 
tariff lines 
(%) 
MFN 2005 13.7 14.1 3.8 26.9 26.7 3.9 11.5 11.9 3.8 
New  
Zealandb 2005 6.3 13.6 54.0 13.1 21.2 38.5 5.1 11.7 56.6 
 2010 0.7 7.3 89.9 1.3 17.2 92.4 0.6 6.1 89.5 
 2015 0.1 10.3 99.4 0.4 10.7 96.1 0.0 0.0 100 
 2020 0.0 0.0 100 0.0 0.0 100 0.0 0.0 100 
 
a  On dutiable" excludes duty-free tariff lines. 
b 10 lines subject to TRQs are not included in the calculation. 
 
Source:  Data furnished by Thailand (M FN-2005 and preferential rates). 
 
4. Table A.3 shows the market access opportun ities in Thailand for New Zealand's top 
25 exports, which in 2002 -2004 accounted on average for over 50 per cent of New Zealand's total 
global exports.  The table shows at which year all HS 6/7-digit tariff lines corresponding to the product definition (i.e. applying to the 6-digit HS code used to capture the volume of trade) will 
become duty-free in Thailand, and the applicable rules of origin. 
5. New Zealand's top 25 exports cover a total of 29 HS 6/7-digit tariff lines. Eight of 
New Zealand's top 25 exports (which account for ni ne HS 6/7-digit lines and 12.3 per cent of its 
average global exports in 2002-2004) already benefit from MFN rates of zero or one per cent in the 
Thai market.  A further four products (accounti ng for 6.3 per cent of New Zealand's average global 
exports) gain immediate duty-free access, five pro ducts are granted duty-free access by 2010 and of 
the remaining nine products, eight gain duty-fr ee access by 2020.  One product, 042010, milk in 
powder granule or other solid form, fat content by we ight not >1.5 per cent, is subject to a TRQ of 
216 per cent which is liberalized in 2025.  With  the exception of kiwifruit which gains immediate 
duty-free access from a base rate of 30 per cent, other products subject to MFN rates of more than 
30 per cent are subject to longer transition periods.  The margin of preference granted by Thailand to 
New Zealand varies from 0 to 216 percentage points. 
Table A.3 
Thailand:  Market access opportunities und er TNZCEP, for New Zealand's top 25 exports 
New Zealand's top 25 export products in 2002-2004 Access Conditions to Thailand's import market 
Under the TNZCEP 
Duty-free in: Share in 
global exports 
Avge MFN 
applied tariff 
2005 
2008 
2009 
2010 
2012 
2015 2020 
(%) HS number & 
description of the product 
(%) No. of HS 6/7-digit linesOrigin rules* 
5.4 040221  Milk in powder/granules/oth. solid form, 
unsweetened, fat content by wt. >1 ... 9.3% 1 1    1 CTH 
4.9 020230  Meat of bovine animals, frozen, boneless 50%      1 CTC 
3.9 020442  Meat of sheep (excl. lamb & carcasses), frozen, 
bone-in 30%   1   CTC 
3.7 999999  Commodities not specified according to kind         
Table A3 (cont'd)WT/REG207/3 
Page 24  
 
  New Zealand's top 25 export products in 2002-2004 Access Conditions to Thailand's import market 
Under the TNZCEP 
Duty-free in: Share in 
global exports 
Avge MFN 
applied tariff 
2005 
2008 
2009 
2010 
2012 
2015 2020 
(%) HS number & 
description of the product 
(%) No. of HS 6/7-digit linesOrigin rules* 
2.7 040210  Milk in powder/granules/oth. solid form, fat 
content by wt. not >1.5% 216%29       C T H  
2.7 440710  Wood sawn/chipped length wise, sliced/peeled, 
whether or not planed, sanded ... 1% 2       CTH 
2.6 040690  Cheese (excl. of 0406.10-0406.40) 30%      1 change in subheading 
2.4 760110  Aluminium, not alloyed, unwrought 1% 1      CTC 
2.2 040510  Butter 30%      1 CTH 
2.1 081050  Kiwifruit, fresh 30% 1      CTC 
2.0 440320  Wood, in the rough, whether or not stripped of 
bark/sapwood/roughly squared ... 1% 1       CTH 
1.6 510121  Wool, not carded/combed, degreased, not 
carbonised, shorn 1% 1       CTC, provided RVC of not less 
than 50 % 
1.6 350190  Caseinates & oth. ca sein derivs.; casein glues 5% 1      change in subheading 
1.6 020443  Meat of sheep (excl. lamb), frozen, boneless 30%   1    CTC 
1.5 080810  Apples, fresh 10% 1      CTC 
1.3 270900  Petroleum oils & oils obt. from bituminous mins., 
crude 0% 1     
 Origin is country in which 
classified crude petroleum oils are obtained in their natural or 
unprocessed state. 
1.3 020422  Meat of sheep (excl. lamb & carcasses), 
fresh/chilled, bone-in 30%    1    CTC 
1.1 350110  Casein 5% 1      change in subheading 
1.0 040590  Fats & oils derived from milk, other than butter & 
dairy spreads 1 1 %   1 1 1 C T H  
1.0 030420  Fish fillets, frozen 5%     1  CTH 
0.9 220421  Wine other than sparkling wine of fresh grapes, 
incl. fortified; grape must ... 57%     2  CTH 
0.8 470321  Chemical wood pulp,  soda/sulphate, other than 
dissolving grades, semi-bleac ... 1% 1       CTH 
0.8 441121  Fibreboard of wood/oth. ligneous mats., whether or 
not bonded with resins/o ... 12.5%    1   CTH 
0.8 710812  Gold (incl. gold plated with platinum), in 
unwrought forms (excl. powder) 0% 1      CTC 
0.7 510111  Wool, not carded/combed, greasy, incl. fleece-
washed wool, shorn 1% 1      CTC, provided RVC of not less 
than 50 % 
       50.6                            Total of Above                                    29                          14   1    1     4   1    4    4 
* CTH=Change in tariff heading, CTC=Change in tariff chapte r, RVC=Regional value content.  RVC is based on either a 
 build-down method or a build-up method.  (See Section B.2 for further details). 
 
Source:  Trade data  2002-2004 ( COMTRADE ), MFN rates and liberalization sche dule taken from data provided by 
 Thailand.  
6. Table A.4 built up on a similar basis as Table A.3 shows the market access opportunities in 
New Zealand for Thailand's top 25 exports (at the HS  6-digit level) which accounted for 38 per cent 
of Thailand's exports to the world in 2003.30  The table shows at which year all HS 8-digit tariff lines 
corresponding to the product definition (i.e applyi ng to the 6-digit HS code used to capture the 
volume of trade) will become duty-free in New Z ealand, and the applicable rules of origin. 
7. Thailand's top 25 exports cover a total of 73 HS 8-digit lines.  Thirteen of Thailand's top 
25 exports (accounting for 16 HS 8-digit lines and 24. 4 per cent of Thailand's global exports in 2003) 
already benefit from zero MFN duties in the New Zealand market, a further ten products (accounting 
                                                      
29 Tariff rate quota freed in 2025. 
30 Exports for 2002 and 2004 were not available from COMTRADE  for Thailand.  WT/REG207/3 
 Page 25 
 
 
for 56 HS 8-digit tariff lines and a further 9.3 per cent of Thailand's global exports) gain immediate 
duty-free access, and one product is granted duty-fr ee access in 2010.  The margin of preference 
granted by New Zealand to Thailand under the TNZCEP varies from 0 to 7 percentage points. 
Table A.4 
New Zealand:  Market access opportunities  under TNZCEP, for Thailand's top 25 exports 
Thailand's top 25 export products in 2003 Access Conditions to New Zealand's import market 
Under the TNZCEP 
Duty-free 
in: Share in global 
exports 
Avge MFN  
tariff 
2005 
2010 
(%) HS number & 
description of the product 
(%) No. of HS 
8-digit linesOrigin rules* 
4.41 847330 Parts & accessories (excl. covers, carrying cases and 
the like)  0% 1  CTH 
3.18 847170 Storage units (of auto. data processing machines) 0% 1  CTS  
3.12 854229 Monolithic integrated circuits , other than digital 0% 1  CTS  
2.24 999999  Commodities not specified according to kind     
2.22 847160 Input/output units (of auto. data processing machines) 0% 1  CTS  
1.99 854221 Monolithic integrated ci rcuits, digital 0% 1  CTS  
1.96 100630 Semi-milled/wholly m illed rice, whether or not 
polished/glazed 0% 1  CTChapter 
1.83 870421 Motor vehicles for the transport of goods (excl. of 
8704.10) 2.3% 2 1 CTH 
1.48 400121 Natural rubber (excl. latex), in smoked sheets 0% 1  must be product of natural plants grown 
within territory of a Party. 
1.40 852812 Reception apparatus for television, whether or not 
incorporating radio-broadcast receiver 0% 1  CTH 
1.30 400129 Natural rubber other than latex/smoked sheets 2% 3  must be  product of natural plants grown 
within territory of a Party 
1.08 160520 Shrimps & prawns, prepared/preserved 2.2% 3  CTChapter 
1.05 841510 Window/wall type air- conditioning machines, self-
contained/split-system 7% 1  CTS 
1.05 030613 Shrimps & prawns, whether or not in shell,  frozen 0% 1  product mu st be wholly obtained 
1.03 160414 Tunas, skipjack & bonito (Sarda spp.), 
prepared/preserved 2.5% 2  CTChapter 
1.03 880390 Parts of goods of 88.01/88.02, n.e.s. in 88.03 0% 1  CTH  
0.97 852990 Parts suit. for use solely with the app. of 85.25-85.28 3.8% 11  CTH 
0.92 853400 Printed circuits 0% 1  CTH 
0.89 711319 Articles of jewellery & parts thereof, of other precious 
metal  3.5% 2  CTS  
0.84 271019 Petroleum oils & oils obtained from bituminous 
minerals. (excl. crude) 1.4% 30  CTH; or from any other good of  2710, 
provided that the good is the product of a 
chemical reaction. 
0.83 854129 Transistors (exc l. photosensitive transistors) 0% 1  CTS  
0.81 270900 Petroleum oils & oils obtained from bituminous 
minerals 0% 1  Origin is country in which the classified 
crude petroleum oils are obtained in their natural or unprocessed state 
0.74 020714 Cuts & edible offal of species Gallus domesticus, 
frozen 5.8% 2  CTChapter 
0.71 852290 Parts (excl. pick-up cartri dges) & accessories  2.5% 2  CTH 
0.71 850110 Electric motors of an output not >37.5W 6.5% 1  CTH 
   37.8                   TOTAL OF ABOVE               73                                                         72       1                                      
 
*  CTH=Change in tariff heading, CTC=Change in tariff chapte r, RVC=Regional value content.  RVC is based on either a 
build-down method or a build-up method.  (See Section B.2 for further details). 
 
Source:  Trade data for 2003 ( COMTRADE ), MFN rates and libera lization schedule taken from data provided by 
 New Zealand. 
 
__________